New renewable energy round may rake in R50bn in investment

The renewable energy industry on Friday got a shot in the arm when Energy Minister Jeff Radebe announced a new bid round of the Renewable Energy Independent Power Producer Procurement programme.

A few months ago, the future of the programme looked uncertain amid Eskom’s concerns about the cost of renewable energy and current electricity overcapacity. Eskom is the designated buyer of electricity under the programme.

But Radebe, since he took over the energy portfolio, has affirmed the government’s commitment to renewable energy. Eskom in April signed the much-delayed power purchase agreements with 27 IPPs. According to the Department of Energy, the 27 projects would results in investments worth R56billion.

Addressing a “stakeholder engagement” in Midrand on Friday, Radebe said the new bid round, known as bid window 5, would be launched in November and was estimated to be 1800MW. “This could bring another R40bn to R50bn of investment to the country,” he said.

The decision to launch a new round followed the expiry of the so-called expedited bid window, for which the 1800MW was set aside. The bid deadline for the expedited bid window was due on October 1, 2015.

“The expedited bid window has expired and therefore it is necessary to embark on a new bid window, which gives an opportunity to drive the socio-economic transformation agenda. Please take note that the intention is to enhance local manufacturing to ensure investment and economic growth as well as the opportunity to encourage opportunities for black industrialists and the development of black independent power producers,” said Radebe.

He said that in the new bid window there would be specific requirements for women-owned business participation and special opportunities for the youth. Socio-economic and enterprises development spend of the IPP programme would be structured in a manner that maximised benefits for communities in which the projects were based.

Nuclear

Meanwhile, Radebe highlighted the benefits of nuclear energy. He said the country was a key global manufacturer and supplier of medical radioisotopes, generating foreign exchange “and contributing to economic growth, while providing a strong foundation and support for local industrialisation, skills development and retention, and job creation.”

He said each year, more than 40million people globally received life-saving medical diagnosis or treatment using nuclear medicine. Up to a quarter of the medical radioisotopes used in such procedures came from the Safari-1 nuclear reactor, which is owned and operated by the South African Nuclear Energy Corporation, he said.

“Nuclear and radiation technology is used to create medical radio-isotopes that offer improved healthcare outcomes and increase the potential for a longer, healthier life for all South Africans,” said Radebe.

He also reiterated his intention to submit adjusted integrated energy plan (IEP), integrated resource plan (IRP), liquid fuels and gas master plans to the cabinet by August. Last month, he announced that the IEP and IRP were open for further consultation.

The IRP document guides the government’s plan for electricity provision within the energy mix, while the IEP provides a roadmap of the future energy landscape for South Africa, which guides future energy infrastructure investments and policy development.

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